(Reuters) – India’s biggest winemaker Sula Vineyards reported a 35% fall in third-quarter profit on Wednesday, as demand took a hit from a slowdown in urban consumption.
Sula’s consolidated net profit fell to 280.6 million rupees ($3.2 million) in the quarter ending Dec. 31, from 429.8 million rupees a year ago.
Urban consumption fell to a two-year low in November, as persistently high food inflation, subdued wage growth and erratic weather patterns led consumers to pull back discretionary spending. Sula gets about 90% of its revenue from urban markets.
Sales were also impacted due to elections in the western state of Maharashtra, which is among Sula’s key markets, during the quarter, the company said.
The winemaker’s own brands segment, which contributes about 90% of the total revenue, saw a marginal 1% rise in revenue during the quarter.
Its smaller wine tourism segment saw a 12% increase in revenue.
Total revenue fell 0.4%, while total expenses rose about 11.4% from a year earlier.
Sula’s core profit margin contracted to 24.8% from 33.5% a year ago.
($1 = 87.3580 Indian rupees)
(Reporting by Ananta Agarwal and Nandan Mandayam in Bengaluru; Editing by Mrigank Dhaniwala)
